Bangkok: 29 Mar. – Kasikorn Research Center Specifies that if the government sector increases the minimum wage to 400 baht/day starting on April 13, according to the proposal and conditions set by the Wage Committee. Although it has little effect on the overall hotel business Since the number of hotels directly affected is less than 5%, it cannot be denied that the costs of operators will increase.
Kasikorn Research Center Specifies that the minimum wage will be raised to 400 baht/day only for hotel businesses in designated areas. and will be effective from April 13, 2024, although it likely will not have much impact on the overall hotel business This is because it is an adjustment only in areas with high tourism economic activity in 10 provinces, only for 4-star or higher hotel groups and employing 50 people or more. Clarity on the definition of 4-star or higher hotel groups must be followed up again. From collecting data on hotels in 10 tourist provinces It was found that there are approximately 770 hotels
in the 4-star and above segment (definition of 4-star service and brand segments), accounting for less than 5% of hotels and accommodations nationwide. Most of these hotels are in popular tourist provinces. There is a high volume of Thai and foreign tourists traveling to places like Phuket, Bangkok, Pattaya (Chonburi) and Samui (Surat Thani).
Many hotels are now paying above minimum wage. This is because the hotel business is experiencing a labor shortage. With the number of workers still not fully returning to the system after being affected by the COVID crisis. Especially hotels in Phuket, Bangkok, Pattaya and Chiang Mai, which have a large number of tourists visiting and in some areas the number is higher than in 2019, causing some operators to hire workers higher than the minimum wage and may already be more than 400 baht per day. Reflected from the results of a survey of daily labor wages in the hotel business where there are recruitment announcements on online media. It was found that in the areas of B
angkok, Phuket and Pattaya, the average price was around 500 baht or more.
However, the increase in the minimum wage has an impact on hotel business operators’ costs. The impact will be different. It depends on what proportion of the operator’s workforce is currently paid less than 400 baht per day. Including in which area? Because each area has different situations regarding the number of tourists and tourist seasons.
As for the group of 5-star hotel operators, it is a group that is not affected much. This is because this group of hotels does not have a high proportion of daily labor hires. From hiring skilled workers to provide services As a result, wages are paid higher than the minimum wage and may already be higher than 400 baht per day. In addition, most of these hotels are in main tourist areas. There are specific customer groups and a large number of tourists. The room rate per night is high. This allows for relatively high margins and flexibility in marketing.
Four-star hotel operators will be mor
e affected due to the large number of hotels. High cost and competition While the nightly room rates are not at a premium level. Group of entrepreneurs who are moderately affected For example, areas in Bangkok, Phuket, Pattaya (Chonburi) will be affected by higher labor costs. amidst high competition But due to business income that is likely to recover The average number of days of stay for tourists is high and depends on the low tourist season. Therefore, the business should be able to manage this additional cost. By keeping other costs constant.
Groups of entrepreneurs who are more affected, such as in the Songkhla area, for example, will have labor costs that will continue to increase at a high rate. Especially if it is a hotel with a high proportion of workers receiving wages less than 400 baht per day. At the same time, the number of tourists is not high compared to the main tourist provinces. Travel depends on the tourist season. Low average number of days of stay and the average price of accommodation
per night is not high (about 3,000 baht per night and may be lower during the low season), causing businesses to have low margins and flexibility to adapt.
Therefore, it remains to be followed by the Cabinet resolution to see what conclusions will be reached on this issue. Including whether the government sector has a way to alleviate the impact on hotel operators, groups that are most affected or not. Because if this comes into force on April 13, entrepreneurs will not have much time left to prepare for liquidity. -511
Source: Thai News Agency